Seagate-Technology
09
Jan

Seagate Technology ‘May’ Own 4.3% of Ripple

STX was up big today on speculation of news with the above headline. If this were to be true, according to speculation of a 4.3% ownership of Ripple, that position could be worth close to $7 billion, more than half of their current market cap. I usually don’t buy stocks off news events, but after juggling the idea in my head for a jiffy, I bought some STX in the low $46’s for the long term account. 4 things appeal to me about STX:

-Pays a big, stable dividend and trading at a relatively low P/E

-In the data storage space; an area ripe with potential for collaboration with the thesis of data decentralization

-A large short interest; fuel to the fire

Alleged investment in Ripple; I’d much rather own a stock-based cryptocurrency investment than an actual cryptocurrency for liquidity reasons

For the life of me, I can never figure out why people choose to short high dividend paying, stable companies. You’re stuck paying the dividend on your short position, minimizing returns in the long run. Surely you can find something better to short, no? Nevertheless, the above is a winning formula for a much higher stock prices. Should the speculation surrounding their position in Ripple prove to be true, expect to see OSTK-like movements in STX.

Ripple is one of the top 4 ‘benchmark’ cryptocurrencies, right up there with the likes of Ethereum and Bitcoin. A 4% position would be nothing small, and STX could very well turn into a trading vehicle for wall streeters looking for exposure to cryptocurrencies through stocks. Also note that Ripple was trading at $0.22 a month ago, in December 2017. It is trading 10x higher at $2.50 now – gains in that Ripple investment would not yet have been factored in.

Speaking of Ripple, Western Union is also in talks with them to use their currency sometime in the future, sending their stock ripping higher. WU already has the infrastructure and customer base in place, they just need to embrace the blockchain rather than fight it.